1 November 2019

AM Best assigns A- rating to Fortegra Financial captive LOTS Re

AM Best has assigned a Financial Strength Rating of A- (Excellent) to LOTS Reassurance Company (Turks and Caicos). The outlook assigned to the rating is stable.

The rating reflects LOTS Re’s balance sheet strength, which AM Best categorizes as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

It also noted that LOTS Re’s ratings benefit from the support of its parent, Fortegra Financial Corporation (FFC). The lead rating unit of this organization is Fortegra P&C Group (Fortegra).

LOTS Re is a Turks and Caicos-incorporated subsidiary of FFC, a US insurance group specializing in credit and warranty business. In 2016, LOTS Re entered into an intercompany reinsurance agreement with other US insurance subsidiaries of FFC to assume a portion of their premiums.

LOTS Re’s adequate balance sheet assessment reflects the organization’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) as of Dec. 31, 2018. Also contributing to the balance sheet assessment is the company’s diverse blend of fixed income securities, equity holdings, BA assets, and other investments, as well as its stable loss reserving trends as a captive reinsurer for Fortegra since 2016.

LOTS Re’s operating performance is assessed as adequate due to its profitable operating results since becoming a captive reinsurer of Fortegra, and reasonable performance projections through 2020. LOTS Re’s business profile is assessed as limited due to its primary function as a captive reinsurer for FFC. LOTS Re’s ERM is assessed as appropriate due to the organization’s shared management framework with Fortegra.

LOTS Re shares management with its parent, and AM Best expects LOTS Re to play a strategically important role in FFC’s global insurance operations. AM Best considers FFC to have satisfactorily demonstrated its willingness to provide capital to its subsidiaries whenever necessary, and expects that willingness to continue.